Sirius XM Subscriber Suit Settled

A U.S. District Court judge in New York approved a settlement between subscribers and Sirius XM. The agreement averts a court trial.

Overall, basic monthly fees will remain the same for those subscribers through the end of 2011.

In the class action suit, subscribers had claimed the satcaster violated antitrust and state consumer protection laws after it raised prices for monthly service after the 2008 Sirius/XM merger. Subscriber Carl Blessing sued in 2009, claiming the company had violated the laws when it raised some prices and levied a music royalty fee.

Subscribers in the suit said the increases broke promises Sirius XM made to win regulatory approval of the merger. The company raised the rate a subscriber paid to get service on an extra radio $2 a month to $8.99. It also began charging $2.99 a month for Internet access; it had been free. A music royalty fee of $1.98 per month was charged after new rates were set with record companies. At the time, the satcaster said the increases were imposed to cover higher operating costs.

U.S. District Court Judge Harold Baer called the settlement fair. Some of those subscribers disagreed; but he concluded that most of the subscribers in the suit would benefit “in the course of their normal subscription payments,” Bloomberg reported. Baer previously had denied class-action status on the state-law claims and let the federal antitrust claim proceed as a group lawsuit for subscribers from July 29, 2008 to July 5, 2011.

The settlement is valued at about $180 million, Bloomberg reports, a combination of money the satcaster loses from lost fee increases, as well as its own attorney fees plus $13 million Sirius XM pays in attorney fees for the lawyers representing the class.

However subscribers will not get cash. Their monthly charges — $12.99 for basic service, $2.99 for Internet access and a $1.98 music royalty fee — will remain at current levels through the end of the year. Sirius XM declined to comment on the decision.